Investment letters

12/2018

Have financial markets been correcting because of underlying weakness in the real economy? Or could it be that market turmoil will be what bring this long-lasting economic upcycle to its knees? As we turn the last page of 2018, the eternal “chicken or egg” question is very much open.

11/2018

October certainly lived up to its adverse reputation, with the S&P 500 index posting its worst monthly decline since 2008, equities losing ground across the globe and bond yields nearing multi-year highs. Still, rather than marking the start of a deeper and broader downturn – one that extends even beyond financial markets – we view the recent corrective episode as a drill for what awaits investors, once the tipping point is eventually reached.

10/2018

What if the main victim of US-promoted trade barriers were its own domestic economy? The European Central Bank recently made such a suggestion, which is also starting to be buttressed by economic data – be it in terms of the US trade deficit or inflation.

09/2018

The current outperformance of US equity indices goes beyond an investor craze for Facebook, Apple, Amazon, Netflix and Google (collectively known as the FAANG stocks). It reflects a new versus old economy battle, which is starting to have serious real-world implications. And this battle is being fought on uneven terms, with still cheap and plentiful money providing an undue advantage to new economy companies.

07/2018

Trade disputes are monopolising investor and media attention, with tough talk unlikely to abate before the US mid-term elections. But what if the more serious issues for financial markets were actually mounting inflationary pressures in the US and failing political unity in Europe?

06/2018

European political waters were supposed to be calmer this year, after the many electoral hurdles of 2017. But investors’ nerves were tested again in late May with the ousting of the Spanish Prime Minister (leaving his successor at the helm of a very fragmented parliament) and complicated negotiations with respect to the formation of a populist government in Italy.

05/2018

An important milestone was reached on April 24, when the US Treasury 10-year yield topped 3%, threatening to undermine the form of “equilibrium” that equity markets had settled into during the past few months.

04/2018

Ten years have gone by since the Great Financial Crisis. The sequence of events that unfolded during this decade has profoundly transformed the world – not only for investors but for society at large. Democracy and free trade are under attack, technocrats have become very powerful, international institutions are unable to fulfil their historical role, and « peace for our time » is no longer assured.

01/2018

As we step into 2018, there is little question as to the direction of the global economy – barring an unexpected external shock. For the first time since the Great Financial Crisis, the OECD in aggregate is operating above potential, thanks to years of easy monetary conditions and the ending of fiscal austerity. Momentum appears to be particularly strong in corporate investment spending, with the compromise on tax cuts signed last month by the US Senate and House of Representatives only to add fuel.

Investment letters

Link all letters

Important information

IMPORTANT INFORMATIONThis document has been produced for information purposes only and does not constitute an offer or recommendation to buy or sell any financial instrument. No representation is made that the views expressed herein are suitable for all investors, as they do not take into account individual circumstances or needs. The content of this document is considered to be reliable at the time of writing but Banque Thaler does not guarantee its timeliness, accuracy or completeness. Past performance is also no guarantee of future returns.